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In general terms explain why certain types of derivative such as options, futures, swaps and other exotic contracts can generate such catastrophically large losses and
In general terms explain why certain types of derivative such as options, futures, swaps and other exotic contracts can generate such catastrophically large losses and even insolvency for financial institutions at times. Does this mean that corporate or institutional use of derivatives should be limited or otherwise regulated? Explain. Give a current example and explain what happened.
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